Puerto Rico needs a massive quantity of supplies to help rebuild in the wake of Hurricane Maria. Because these supplies must largely be shipped by cargo vessel, this has drawn attention to a nearly century-old law called the Jones Act. Long-standing opponents of the Jones Act haven’t let the crisis go to waste, and have exploited the humanitarian tragedy in Puerto Rico to advance a long-standing goal of full repeal.
For those who don’t know: The Jones Act simply requires that vessels that transport cargo from one U.S. port to another U.S. port (including ports in Puerto Rico, part of American territory) must be U.S.-flagged, U.S.-crewed, U.S.-owned, and U.S.-built. This “cabotage” law is similar to one that applies to airlines serving U.S. cities. The Jones Act preserves our domestic market for American seafarers, shipowners, and shipyards, all of whom pay U.S. income taxes, rather than enabling low-wage, foreign-flag ship operators to penetrate our economy.
The Jones Act is highly prized by U.S labor unions and considered by many to be a key pillar supporting American blue-collar jobs. Repeal has been advocated at places such as Heritage, Reason, and The Federalist, for example. Yet repeal of the Jones Act would be an epic disaster for the U.S. maritime industry, threaten the environment and safety of workers in the United States, and critically wound our preparedness for global conflict.
Why Maritime Industries Need Government Preferences
While firm supporters of free markets and free trade understandably oppose protectionist laws, the maritime sector has a number of unique qualities that make it categorically different. Chief among these is the inherent mobility of marine assets. This is illustrated by way of example.
If I desired to construct a textile factory in the United States to serve U.S. markets, I would understandably be required to comply with U.S. building and land regulation, employ U.S. persons, adhere to U.S. employment and environmental law, and naturally use U.S. construction companies to build my facility.
Absent the Jones Act, if I desired to similarly provide cabotage (U.S. port to U.S. port) cargo or passenger service, I could completely skirt U.S. laws and regulations by constructing my vessel in a low-cost Asian shipyard; hiring a foreign crew at cut-rate wages, benefits, and working conditions; avoiding U.S. maritime safety and environmental regulations; and just drive my vessel into the United States to do business in domestic waters. It is as if my factory, built by foreign labor, employing foreigners, and exempt from U.S. regulation, was plopped down in the middle of Missouri across the street from a similar factory that is subject to all the U.S. regulations. My U.S.-compliant rival would rightly complain about an unfair competitive environment!
In addition to the unique mobility issue is military readiness. Our decades of relative peace have faded this argument into the background, but it remains crucial that the U.S. maintain an independent shipbuilding and marine cargo capability to serve our nation in wartime. The Jones Act ensures this capability through a stable industry in which we develop U.S. persons as qualified merchant mariners, and maintain U.S.-flag vessels that can be mobilized in an emergency (it is notable that, for instance, Crowley Maritime Corp. has mobilized a fleet of Jones Act relief vessels, which reportedly exceeds the available port capacity in Puerto Rico).
Additionally, the Jones Act protects our environment by ensuring that only U.S.-regulated vessels operate in domestic trade, and protect the maritime workforce by being subject to U.S. safety regulations. Would you really want to see a lowest-common-denominator-built-and-flagged cargo vessel, crewed by severely underpaid and overworked foreign mariners, plying the highly sensitive waters of the Mississippi? It’s quite hard to imagine its foreign owner, with no physical assets in the United States, would be very interested in cooperating with authorities and making people whole were it to spill fuel, or run aground and shut down a major American waterway.
Don’t Forget the Jobs that Depend on Exclusive Port Rights
Also, good blue-collar U.S. jobs would be lost in a full repeal. Nine out of ten U.S. mariners work in the domestic trade. More than 40,000 vessels are in the Jones Act fleet, and the domestic maritime industry accounts for more than half a million U.S. jobs. Maritime jobs are prime examples of skilled labor, requiring rigorous training and continuous individual development. U.S. maritime academies and a robust apprenticeship tradition pass crucial knowledge from generation to generation. All of this would be lost if the Jones Act were repealed.
There are fair arguments and discussions of how the Jones Act should apply to overseas states and territories, particularly in emergencies. There is indeed a waiver process to address just that. But instead of thoughtful discussion about waivers for this specific crisis, politicians and pundits are exploiting the disaster to push for wholesale repeal, thinking it a panacea for Puerto Rico’s problems. For example, Sen. John McCain, who has long opposed the Jones Act in its entirety, has with Sen. Mike Lee just proposed a bill to exempt Puerto Rico from the law for good.
In most cases, this opportunism is a clear case of the punditry’s chronic Chesterton’s Fence problem. Few understand or appreciate the importance of the Jones Act to U.S. maritime policy, simply wishing to tear it down because they think it’s in their way.
The Jones Act has broad, bipartisan support that endures nearly a century after it was passed into law. Repeal would gut our domestic maritime industry, kill jobs, and destroy the lineage of qualified U.S. merchant mariners, threaten the environment, threaten worker safety, and ultimately make us highly unprepared to transport our tanks, personnel, and other cargo in a military conflict. Should we do that all to somewhat reduce the cost of shipping diapers and bottled water?